nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2022‒04‒18
nine papers chosen by
Marek Giebel
Universität Dortmund

  1. Climate protection potentials of digitalized production processes: Microeconometric evidence? By Axenbeck, Janna; Niebel, Thomas
  2. Political ignorance and the internet By Bertschek, Irene; Müller, David F.
  3. How internet helped firms cope with COVID-19 By Joël Cariolle; Florian Léon
  4. Artificial intelligence and firm-level productivity By Czarnitzki, Dirk; Fernández, Gastón P.; Rammer, Christian
  5. Digitalization and Resilience: Firm-level Evidence During the COVID-19 Pandemic By Nordine Abidi; Sahra Sakha; Mehdi El Herradi
  6. GovTech Practices in the EU By KUZIEMSKI Maciej; ULRICH Peter; MERGEL Ines; MARTINEZ Amanda
  7. Can Social Media Inform Corporate Decisions? Evidence from Merger Withdrawals By Cookson, J. Anthony; Niessner, Marina; Schiller, Christoph M.
  8. To Participate Or Not To Participate: An Investigation Of Strategic Participation In Standards By Paras Bhatt; Claire Vishik; Govind Hariharan; H. Raghav Rao
  9. Digitalization and Tax Compliance Spillovers: Evidence from a VAT e-Invoicing Reform in Peru By Mr. Matthieu Bellon; Salma Khalid; Jillie Chang; Pilar Villena; Juan Carlos Paliza; Ms. Era Dabla-Norris

  1. By: Axenbeck, Janna; Niebel, Thomas
    Abstract: Although information and communication technologies (ICT) consume energy themselves, they are considered to have the potential to reduce overall energy intensity within economic sectors. While previous empirical evidence is based on aggregated data, this is the first large-scale empirical study on the relationship between ICT and energy intensity at the firm level. For this purpose, we employ administrative panel data on 28,600 manufacturing firms from German Statistical Offices collected between 2009 and 2017. Our results confirm a statistically significant and robust negative link between software capital as an indicator for the firm-level degree of digitalization and energy intensity, but the effect size is rather small. Hence, we conclude that energy intensity reductions related to the use of digital technologies are lower than expected.
    Keywords: ICT,Firm-level panel data,Energy intensity improvements
    JEL: D22 D24 L60 O12 O14 O33 Q40
    Date: 2021
  2. By: Bertschek, Irene; Müller, David F.
    Abstract: We examine the link between Internet usage and political ignorance. We construct a novel Index as a direct measure of individuals' indifference with respect to political issues which determines the degree of individual political ignorance. Our econometric analysis is based on a rich data set consisting of six surveys of individuals covering the time period 2001 to 2014 and being representative for the German electorate. The empirical results show that in the earlier years of Internet diffusion there is a negative link between using the Internet and political ignorance. This link changes sign in later years of Internet diffusion. We discuss potential explanations of this observed change in the link such as information overload and the increase in heterogeneity of Internet users.
    Keywords: Internet,information cost,indifference index,political ignorance
    JEL: D80 O33
    Date: 2021
  3. By: Joël Cariolle (FERDI - Fondation pour les Etudes et Recherches sur le Développement International); Florian Léon (FERDI - Fondation pour les Etudes et Recherches sur le Développement International)
    Abstract: This paper questions whether firms' internet connectivity and adoption helped them cope with the COVID-19 pandemic. Using data on 31,387 firms from 39 developing and developed economies, our results stress that businesses using website before the crisis showed higher absorption capacities than other firms during the crisis. The positive role of website use was mainly through the adoption of coping strategies, in particular home-delivery services, online sales or remote work. In contrast, the positive effect played by the prior use of internet is not explained by better access to external public (government support) or private (bank loan) financial resources. If prior internet use had a role on the resilience of firms, this is not the case for internet access. A negative effect of firm survival and labour adjustments is indeed found, but further analysis shows that this finding is explained by the mediating effect of 4G coverage on COVID policies' stringency, suggesting that these policies were more effective in places with better internet coverage.
    Keywords: Covid-19,Internet,Firm,Shock,Resilience
    Date: 2022–03–01
  4. By: Czarnitzki, Dirk; Fernández, Gastón P.; Rammer, Christian
    Abstract: Artificial Intelligence (AI) is often regarded as the next general-purpose technology with a rapid, penetrating, and far-reaching use over a broad number of industrial sectors. A main feature of new general-purpose technology is to enable new ways of production that may increase productivity. So far, however, only very few studies investigated likely productivity effects of AI at the firm-level; presumably because of lacking data. We exploit unique survey data on firms' adoption of AI technology and estimate its productivity effects with a sample of German firms. We employ both a cross-sectional dataset and a panel database. To address the potential endogeneity of AI adoption, we also implement an IV approach. We find positive and significant effects of the use of AI on firm productivity. This finding holds for different measures of AI usage, i.e., an indicator variable of AI adoption, and the intensity with which firms use AI methods in their business processes.
    Keywords: Artificial Intelligence,Productivity,CIS data
    JEL: O14 O31 O33 L25 M15
    Date: 2022
  5. By: Nordine Abidi; Sahra Sakha; Mehdi El Herradi
    Abstract: The COVID-19 pandemic has resulted in an unprecedented shock to firms with adverse consequences for existing productive capacities. At the same time, digitalization has increasingly been touted as a key pathway for mitigating economic losses from the pandemic, and we expect firms facing digital constraints to be less resilient to supply shocks. This paper uses firm-level data to investigate whether digitally-enabled firms have been able to mitigate economic losses arising from the pandemic better than digitally-constrained firms in the Middle East and Central Asia region using a difference-in-differences approach. Controlling for demand conditions, we find that digitally-enabled firms faced a lower decline in sales by about 4 percentage points during the pandemic compared to digitally-constrained firms, suggesting that digitalization acted as a hedge during the pandemic. Against this backdrop, our results suggest that policymakers need to close the digital gap and accelerate firms’ digital transformation. This will be essential for economies to bounce back from the pandemic, and build the foundations for future resilience.
    Keywords: COVID-19, digitalization, technology adoption, economic resilience, Middle East and Central Asia; digitally-enabled firm; digitally-constrained firm; firms in the Middle East; firm-level data; digital transformation; COVID-19; Digitalization; Financial inclusion; Foreign corporations; Middle East and Central Asia; Asia and Pacific; Africa; Middle East; North Africa
    Date: 2022–02–18
  6. By: KUZIEMSKI Maciej; ULRICH Peter (European Commission - JRC); MERGEL Ines; MARTINEZ Amanda
    Abstract: To support governments in the EU embracing GovTech, this report provides an overview of the diversity of GovTech programmes and shares lessons learnt for setting up government-run GovTech programmes. While the focus of this report is on national GovTech programmes, its findings and conclusions can be applied to others levels of government as well. The term GovTech refers to the use of emerging technologies and digital products and services by government from start-ups and SMEs - instead of relying on large system integrators. This report presents an overview of how the existing GovTech programmes are set up in different EU member states and introduces practical case studies. This is followed by a discussion of the rationale of governments’ investment in GovTech and the barriers countries have encountered when engaging with the GovTech ecosystem. The report then distils important lessons learned for setting up government-run GovTech programmes. This report is aimed at anyone wanting to understand how governments are already supporting GovTech, and especially public sector managers who are looking for a starting point for establishing or improving a GovTech programme. It is part of two twin reports on GovTech developed by the JRC with support from the ISA² programme.
    Keywords: GovTech, Artificial Intelligence, Digital Government, Digital Transformation, Public Sector
    Date: 2022–03
  7. By: Cookson, J. Anthony; Niessner, Marina; Schiller, Christoph M.
    Abstract: This paper examines the role of social media in informing corporate decision-making by studying the decision of firm management to withdraw an announced merger. A standard deviation decline in abnormal social media sentiment following a merger announcement predicts a 0.73 percentage point increase in the likelihood of merger withdrawal (18.9% of the baseline rate). The informativeness of social media for merger withdrawals is not explained by abnormal price reactions or news sentiment, and in fact, it is stronger when these other signals disagree. Consistent with learning from external information, we find that the social media signal is most informative for complex mergers in which analyst conference calls take a negative tone, driven by the Q&A portion of the call. Overall, these findings imply that social media is not a sideshow, but an important aspect of firm information environment.
    Date: 2022–03–16
  8. By: Paras Bhatt; Claire Vishik; Govind Hariharan; H. Raghav Rao
    Abstract: Essential functionality in the ICT (Information and Communication Technology) space draws from standards such as HTTP (IETF RFC 2616, Bluetooth (IEEE 802.15) and various telecommunication standards (4G, 5G). They have fuelled rapid growth of ICT sector in the last decades by ensuring interoperability and consistency in computing environment. Research shows that firms that backed ICT standards and participated in standards development, have emerged as industry innovators. Standards development thus clearly has benefits for participating companies as well as technology development and innovation in general. However, significant costs are also associated with development of standards and need to be better understood to support investment in standardization necessary for todays ICT environment. We present a conceptual model that considers the potential for market innovation across a standards lifecycle and efficiency from standardization work, to build a forward-looking decision model that can guide an organizations standards development activities. We investigate and formalize motivations that drive firms to participate in standardization, specifically, changes in market innovation. Our model can serve as a strategic decision framework to drive assessments of a firms participation in standards development. We test our model with a use case on an established access control approach that was standardized more than two decades ago, Role Based Access Control (RBAC) using historical data. The investigation of the case study shows that change in market innovation is a significant indicator of success in standards development and are viable criteria to model a firms decision to participate (or not to participate) in a specific area of standardization.
    Date: 2022–04
  9. By: Mr. Matthieu Bellon; Salma Khalid; Jillie Chang; Pilar Villena; Juan Carlos Paliza; Ms. Era Dabla-Norris
    Abstract: Our study uses administrative data on firm-to-firm transactions and quasi- experimental variation in the rollout of electronic invoicing reforms in Peru to study the diffusion of e-invoicing through firm networks and its effect on tax compliance. We find that voluntary e-invoicing adoption is higher amongst firms with partners who are mandated to adopt e-invoicing, implying positive technology adoption spillovers. Spillovers are stronger from downstream partners and from export-oriented firms. Firms are less likely to continue transacting with a partner who has been mandated into e-invoicing, with the effect only partially reversed if both firms adopt e-invoicing, suggesting that network segmentation may occur. Smaller firms who transact with partners mandated into e-invoicing report 11 percent more sales and pay 17 more VAT in the year that their partner is mandated to adopt e-invoicing, suggesting positive spillovers in tax compliance behavior for this subset of firms.
    Keywords: VAT, tax compliance, technology spillovers, firm transaction data
    Date: 2022–03–18

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